Posted 4 years ago on Dec. 29, 2011, 11:22 a.m. EST by RobPenn
(116)
This content is user submitted and not an official statement

is that they don't take into account the state of the people involved.

For instance, the stimulus plan. Am I wrong in saying that it wasn't nearly as effective as they said it would be, if it was productive at all?

In my Psychology of Consumer Behavior class, there was mention of some psychologists who suggested that it would have been more effective if it was called a "Stimulus Bonus" - something extra that you don't have to put into your budget.

I'm not sure I agree. I think people would still have saved it, because the people see what's happening in the economy, as well as feeling it in their own lives, and feel the need to spend their money less and save more for the essentials. I know I would have.

17 Comments

The stimulus money did not reach the productive economy. The recession began when businesses were unable to obtain loans.

Banks are now able to collect interest from the Federal Reserve on their capitol base. This policy began coincident with the recession/depression along the same time as risky speculative derivative trading began to implode

Our money is created, not by the government, but by banks. Many authorities have confirmed this, including the Federal Reserve itself. The only money the government creates today are coins, which compose less than one ten-thousandth of the money supply. Federal Reserve Notes, or dollar bills, are issued by Federal Reserve Banks, all twelve of which are owned by the private banks in their district. Most of our money comes into circulation as bank loans, and it comes with an interest charge attached.

According to Margrit Kennedy, a German researcher who has studied this issue extensively, interest now composes 40% of the cost of everything we buy. We don’t see it on the sales slips, but interest is exacted at every stage of production. Suppliers need to take out loans to pay for labor and materials, before they have a product to sell.

For government projects, Kennedy found that the average cost of interest is 50%. If the government owned the banks, it could keep the interest and get these projects at half price. That means governments—state and federal—could double the number of projects they could afford, without costing the taxpayers a single penny more than we are paying now.

Occupy San Francisco has now endorsed a plan aimed at doing just that. In a December 1 Wall Street Journal article titled “Occupy Shocker: A Realistic, Actionable Idea,” David Weidner writes:

Protesters in the Bay Area, especially Occupy San Francisco, have something their East Coast neighbors don't: a realistic plan aimed at the heart of banks. The idea could be expanded nationwide to send a message to a compromised Washington and the financial industry.

It's called a municipal bank. Simply put, it would transfer the City of San Francisco's bank accounts—about $2 billion now spread between such banks as Bank of America Corp., UnionBanCal Corp. and Wells Fargo & Co.—into a public bank. That bank would use small local banks to lend to the community.

The public bank concept is not new. It has been proposed before in San Francisco and has a successful 90-year track record in North Dakota. Weidner notes that the state-owned Bank of North Dakota earned taxpayers more than $61 million last year and reported a profit of $57 million in 2008, when Bank of America had a $1.2 billion net loss. The San Francisco bank proposal is sponsored by city supervisor John Avalos, who has been thinking about a municipal bank for several years.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. – Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations. -Andrew Jackson

The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity. -Abraham Lincoln

Issue of currency should be lodged with the government and be protected from domination by Wall Street. We are opposed to…provisions [which] would place our currency and credit system in private hands. – Theodore Roosevelt

“Banks lend by creating credit. They create the means of payment out of nothing. ” Ralph M Hawtry, former Secretary to the Treasury.
“… our whole monetary system is dishonest, as it is debt-based… We did not vote for it. It grew upon us gradually but markedly since 1971 when the commodity-based system was abandoned.” The Earl of Caithness, in a speech to the House of Lords, 1997.

“The bank hath benefit of interest on all moneys which it creates out of nothing.” William Paterson, founder of the Bank of England in 1694, then a privately owned bank

“Let me issue and control a nation’s money and I care not who writes the laws.” Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

Interesting idea, I do think we need to deal with fed banks as well, can't have them running the printing presses at full speed. I'm all for a deregulated wall street that is not a part of or allowed to borrow from the fed system ---then regulate fed banks since it does impact every American how much leverage fed banks are handing out.
At the 1% they are charging for dollars now banks are just buying higher yield products now and making money on the spread, not lending to businesses , that's a big part of why the stimulus money never made it into the economy. The other big problem we have is that we were trying to run our entire economy on loans for houses, now that that bubble popped it would take 3 or 4 trillion dumped right into the economy to have any effect and that money would just end up in China or the middle east due to our trade deficit. We need to fix the trade deficit it's the root of all of our and Europe's problems.

So, the national savings rate has gone up from nothing to 5%, and the higher percentage of national savings means the nation is not interested in saving? Am I just not really understanding what you mean by your post? (totally possible, I do that a lot.)

How much does Government Savings (read "Government Deficits") factor into us having such a low percentage?